When it comes to planning for retirement, most people find the idea really daunting. It doesn’t have to be complicated though. A pension can be a straightforward and tax efficient way of investing in your future.
Why invest in your retirement fund/pension?
A pension otherwise known as retirement funding, is a long term savings plan which is designed to give you an income when you stop working. Substantial tax reliefs apply, which alone are the most important aspect of them. Quite simply, a pension is a long term savings plan which is designed to give you an income when you stop working.
And the sooner you start to invest, the bigger your retirement fund is likely to be.
Tax relief on your contribution
The government offers generous tax and PRSI relief on your pension contributions, based on your highest rate of tax. So if you were to invest, say, €10,000 a month, it could actually cost you as little as €5,900 assuming you pay tax at 41%.
“Tax relief on the way in, and up to 25% tax-free on the way out. Who said pension planning was taxing?”